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Glass ceiling for Hyundai

Too much: Australians won't see premium Hyundais like the Genesis.

Hyundai admits it's not ready to sell cars for more than $50,000 in Australia

20 Aug 2007

HYUNDAI Motor Co Australia has identified its own $50,000 glass ceiling.

The South Korean car-maker believes Australians are not prepared to consider paying more than that for cars with the Hyundai badge on the nose.

The issue of the Hyundai brand value is behind the decision to not pursue either the new rear-drive Genesis large sedan or the Veracruz luxury SUV for sale in Australia.

At this stage, those two models are left-hand-drive only, but Hyundai Australia has revealed did not press for them to also be available for right-hand-drive markets because they would cost more than Australians are prepared to pay.

Hyundai Motor Co Australia sales and marketing manager Kevin McCann said the company was not yet as respected here as it is in the US. “We are in a different position here than we are in the US where there is a different brand position. We still have to move up to that (point) to start to present more feasible business cases for such cars,” Mr McCann said.

He estimated the VeraCruz would have cost in the region of $60,000 if it did come to Australia, which would be too much.

“We would have to take a risk on how many cars we can sell and what we can sell them at and that is a tough number,” Mr McCann said.

Hyundai Motor Co Australia chief executive Steve Yeo said Hyundai was improving its reputation here, but said the cars are still better than many people think.

“We have grown sales here from under 31,000 units in 2003 to around 47,000 last year, but perception is still left a little behind the reality,” Mr Yeo said.

1 center imageLeft: Veracruz luxury crossover.

“We know that for the next stage of our growth in Australia we have to change people’s perceptions about our brand and our product.” Mr McCann said Hyundai was slowly building up its brand value with the goal of being able to charge the same amount as its Japanese rivals for comparable vehicles.

He likened Hyundai Australia’s position to Skoda in the United Kingdom, which not only dramatically increased its sales volume but also its brand value in just five years.

“Our main goal would be the improvement of our price position. We can’t afford to lose volume doing that, but we don’t have a problem with volume. Skoda had a lot of work to do on both counts,” McCann said.

An important part of Hyundai’s plan to improve customer perception of its brand includes the next generation Tiburon sportscar.

McCann said Hyundai Australia was pushing hard to bring the new coupe here in 2009.

It is understood the Tiburon replacement, the name of which is yet to be determined, will be much more of a thoroughbred sportscar than the current front-drive car.

Reports from the US suggest the new sportscar will be based on the same platform as the Genesis large sedan and will therefore be rear-wheel-drive.

The next-generation Tiburon is expected to be offered with a V6, but it is not yet clear whether it will also be available with a V8 engine like the Genesis donor car.

While the company is preparing to expand at the higher end of its brand, Hyundai Australia also wants a piece of the lucrative commercial vehicle market.

It will introduce its first commercial model, codenamed TQ, early next year.

The car was first shown at the Seoul Motor Show this April and is modeled on large load haulers like the Ford Transit and Renault Trafic.

The TQ will be available as a load carrier, but Hyundai will also offer the vehicle with rows of seats in the rear cargo area.

McCann said Hyundai expected to sell 70 per cent of TQs as pure commercial vehicles and the rest as people movers.

Having a people mover option will be important to Hyundai as it is now running out of stock of the Trajet people mover, which has now been discontinued.

Hyundai Australia will also introduce a new smaller five-seater mini people mover within the next two years to help cover the loss of the Trajet.

Another model to drop off the Hyundai Australia model list is the Terracan four-wheel-drive, the only model in the range that could be seriously classed as an off-roader.

Hyundai killed off the car to pour its efforts and resources into the more luxurious and more profitable VerCruz model for South Korea and the United States.

The first important new model Hyundai hopes will help boost its stocks is the new Elantra hatch, which will be called the I30.

The five-door i30 hatch is expected to touch down here in October, meaning it is the likely star Hyundai attraction at the Australian Motor Show in Sydney in that month.

Hyundai will attempt to draw new customers to the brand with the new small hatch and let slip to GoAuto that the car will be available with a diesel engine.

“Offering a diesel engine in that segment is also an addition (to our sales),” said McCann.

It is not yet clear which diesel engine will be offered with the I30, the choices in Europe include a 1.6-litre and 2.0-litre diesels, both are common-rail diesels with variable-geometry turbochargers.

Read more:

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Veracruz signals Hyundai's luxury intent

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